When AustSino Resources Group Limited (DB:GHJ) announced its most recent earnings (31 December 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well AustSino Resources Group has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see GHJ has performed. View our latest analysis for AustSino Resources Group
Was GHJ weak performance lately part of a long-term decline?
I prefer to use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend allows me to assess different companies on a similar basis, using the most relevant data points. For AustSino Resources Group, its most recent earnings (trailing twelve month) is -AU$3.44M, which compared to the previous year’s level, has become more negative. Since these figures are relatively short-term, I have calculated an annualized five-year figure for GHJ’s earnings, which stands at -AU$4.99M. This means that, despite the fact that net income is negative, it has become less negative over the years.
We can further examine AustSino Resources Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years AustSino Resources Group has seen an annual decline in revenue of -23.69%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the DE metals and mining industry has been amplifying average earnings growth of 50.86% over the past twelve months, and a flatter 1.53% over the past half a decade. This means that any tailwind the industry is profiting from, AustSino Resources Group has not been able to gain as much as its average peer.
What does this mean?
Though AustSino Resources Group’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to predict what will occur going forward, and when. The most valuable step is to assess company-specific issues AustSino Resources Group may be facing and whether management guidance has dependably been met in the past. You should continue to research AustSino Resources Group to get a more holistic view of the stock by looking at:
- Financial Health: Is GHJ’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.